MANUFACTURING AND DEVELOPMENT AGREEMENT
EXHIBIT
99.1
This
Manufacturing and Development Agreement (the "Agreement") is entered into as of
the _____ day of June, 2002, by and between BOVIE MEDICAL CORPORATION, a
Delaware corporation with its principal place of business at 0000 00xx Xxxxxx
Xxxxx, Xx. Xxxxxxxxxx, XX 00000-0000 ("Bovie"), and ARTHREX, INC., a Delaware
corporation having its principal place of business at 0000 Xxxxx Xxxxxxxxx
Xxxxx, Xxxxxx, XX 00000 ("Arthrex").
WHEREAS,
Bovie manufactures, packages and sells certain devices for resale and desires to
manufacture and supply the Products (as defined below); and
Arthrex;
WHEREAS,
Arthrex desires that Bovie manufacture and supply the Products to
Arthrex;
NOW,
THEREFORE, in consideration of the terms and provisions of this Agreement, and
for other good and valuable consideration, the receipt and sufficiency of which
is hereby acknowledged, Bovie and Arthrex agree as follows:
1.0 DEFINITIONS.
1.1
An
"Affiliate" of a Person means any company, corporation, partnership, limited
liability company, association, organization, entity, individual or other that
directly or indirectly controls, is controlled by or is under common control
with such Person.
1.2
"Delivery
Date" means a date for which delivery of Product is properly requested in a
Purchase Order (as such term is hereinafter defined).
1.3
"FDA"
means the United States Food and Drug Administration or any successor agency or
authority, the approval of which is required to market, distribute, supply and
sell health care products in the United States.
1.4
"Net
Purchase Price", on any given date, shall mean the aggregate purchase price of
all purchases made by Arthrex pursuant to Section 2.2 as of the date hereof
until such date. For purposes of clarification, and of not of limitation, the
Net Purchase Price shall not reflect any credits applied to purchases by Arthrex
in accordance with Section 2.1 (c).
1.5
"Product
or Products" mean anyone or more of the devices and components set forth in
Appendix A, and such other devices and components as may be added, in writing,
to Appendix A by Arthrex from time to time.
1.6
"Purchase
Order" means a written order issued by Arthrex to Bovie with respect to
purchases of Products, substantially in the form attached hereto as Appendix B,
which shall be subject to, and governed exclusively by, the terms of this
Agreement.
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2.0 PURCHASE
AND SALE OF PRODUCTS.
2.1 Bovie’s
Supply and Development Obligations
(a) Bovie
shall use its best efforts to supply Arthrex with its Product requirements.
Subject to the provisions of Section 5 below, all Products sold under this
Agreement shall conform in all material respects to the product specifications
("Product Specifications") and the manufacturing processes ("Manufacturing
Processes") set forth in Appendix A, attached hereto.
(b) Subject
to Section 2.1(d), Bovie shall agree to any reasonable and lawful modification
to the Product Specifications or the Manufacturing Processes requested by
Arthrex in writing, which are designed to improve the Products; provided,
however, that
Bovie shall have a reasonable period of time to implement such modified Product
Specifications and Manufacturing Processes.
(c) Bovie
shall provide, from its own personnel, the equivalent of two . engineers who
shall be dedicated full-time to the proposal set forth in the immediately
succeeding sentence, and other related personnel as needed, in Bovie's
discretion, to accomplish the purposes of this Agreement, for the first six
months of the Term (as defined below). Such personnel shall perform tests,
trials and research with respect to the Products and shall, at Bovie's sole
expense, provide any improvements to the Products and the design of Products as'
they feel necessary or desirable to the development of the Products
("Inventions"); provided,
however, that no
changes shall be made to the Products or the Product Specifications without the
prior written consent of Arthrex which may be withheld in Arthrex's sole and
absolute discretion. In consideration therefor, Arthrex shall pay Bovie
**
** per month (the "Development Payments"), the first such monthly payment being
payable as of June 1, 2002. Arthrex ** ** ** ** ** ** such Development Payments
** ** the first cumulative purchases of Products by Arthrex under Section 2.2 of
this Agreement in accordance with the following schedule: (i) ** ** the
Development Payments ** ** to Arthrex upon ** ** of Products with a ** ** equal
to ** **; (ii) ** ** the Development Payments ** ** upon its ** ** ** **
Products with a ** ** equal to ** **; and (iii) ** ** the Development Payments
** ** to Arthrex upon its ** ** Products with a ** ** equal to ** **. Arthrex
may continue ** ** ** ** until such time that the full amount of the Development
Payments has been ** **.
(d) Notwithstanding
anything to the contrary in Sections 2. 1 (b) and (c), in the event that any
change or modification to the Products or the Product Specifications results in
a material change to the costs incurred by Bovie in the development, production,
manufacture, sterilization and/or packaging of the Products, Bovie shall so
notify Arthrex prior to the implementation of the change or modification and,
upon the written consent of Arthrex thereto, the purchase Prices, as set forth
in Section 3.1, shall be modified accordingly.
(e) Bovie
agrees, and shall cause its officers, directors, employees, advisers, agents and
consultants (collectively, "Representatives") to agree, that all Inventions
shall be the sole property of Arthrex to the maximum extent permitted by
applicable law and to the extent permitted by law shall be "works made for hire"
as that term is defined in the United States Copyright Act (17 USCA, Section
101). Arthrex shall be the sale owner of all patents, copyrights, trade secret
rights and other intellectual property or other rights in connection with the
Inventions. Bovie shall, and shall cause its Representatives to, assign to
Arthrex all right, title and interest Bovie and/or its Representatives may have
or acquire in any and all Inventions. Bovie shall, and shall cause its
Representatives to, assist Arthrex in every proper way to obtain, and from time
to time, enforce, all patents, copyrights or other rights on said improvements
in any and all countries, and to that end Bovie shall, and shall cause its
Representatives to, execute all documents necessary. Arthrex shall have the sole
and exclusive right to:
(i) apply
for, obtain and vest in the name of Arthrex alone (unless Arthrex otherwise
directs) letters patent, copyrights or other analogous protection in any country
throughout the world and when so obtained or vested to renew and restore the
same in its sale discretion; and
(ii) defend
any opposition proceedings in respect of such applications and any opposition
proceedings or petitions or applications for revocation of such letters patent,
copyright or other analogous protection.
(f) Bovie's
and its Representatives' obligations to assist Arthrex in obtaining and
enforcing patents and copyrights for the Inventions in any and all countries, as
set forth above, shall continue beyond the Term, at Arthrex's cost.
..
2.2 Arthrex's
Purchase Obligations
(a) Subject
to Section 2.11, Arthrex shall engage Bovie as the exclusive
manufacturer of one
hundred percent (100%) of its
Product requirements in the marketplace, including, without limitation, Products
required for engineering, testing and clinical trials, if any. Except as
expressly set forth herein, Arthrex agrees to purchase all of its Product
requirements exclusively from Bovie, and from no other manufacturer, person or
entity, including, without limitation, any entity belonging, in whole or in
part, to Arthrex.
(b) Subject
to Section 2.2(a) above, Arthrex shall provide Bovie with firm Purchase Orders
for Products in accordance with the lead-times set forth in Section 2.4(a);
provided, that Arthrex shall have the right, up to the date of manufacture, and
with the consent of Bovie, which shall not be unreasonably withheld, to issue
binding, written change orders to increase or decrease the quantity of such
Purchase Orders. Arthrex agrees to accept partial shipments of Products should
it, for any commercially reasonable reason, become necessary to ship in advance
of order completion. Bovie shall make all commercially reasonable efforts to
comply with any revisions to Purchase Order requirements consistent with the
provisions of Section 2.3. Within seven days after receipt of a Purchase Order
from Arthrex, Bovie shall acknowledge such receipt and confirm whether the order
can be supplied.
2.3 Estimates
of Requirements
(a) (i) Upon
execution and delivery of this Agreement, and upon each successive
three-month
anniversary of the execution and delivery of this Agreement, Arthrex shall
deliver to Bovie a rolling
three-month written
commitment of Arthrex's requirements of Products for the immediately succeeding
three-month period
(each, a "Quarterly
Commitment"). Arthrex shall deliver Quarterly
Commitments to Bovie no later than 30 days prior to the applicable three-month
anniversary date. Bovie shall, no later than 15 days after receipt of each
Quarterly
Commitment, notify Arthrex of any prospective problems, of which Bovie is aware,
that might prevent Bovie from meeting Arthrex's order quantities or estimated
Delivery Dates.
(ii) Upon
execution and delivery of this Agreement, and upon each successive annual
l2-month
anniversary of the execution and delivery of this Agreement, Arthrex shall
deliver to Bovie a written, non-binding good faith estimate of Arthrex's
requirements of Products from Bovie for delivery during the immediately
succeeding 12
months (each,
an
"Annual Forecast").
Arthrex shall deliver Annual
Forecasts to Bovie no later than 60 days
prior to the applicable annual
anniversary date. Bovie shall, no later than 15 days
after receipt of each Annual
Forecast, notify Arthrex of any prospective problems, of which Bovie is aware,
that might prevent Bovie from meeting Arthrex's forecasted requirements or
estimated Delivery Dates.
(b) Bovie and
Arthrex agree to cooperate with each other and work jointly to establish and
maintain a smooth and efficient timetable for the manufacture and supply of
Products to Arthrex hereunder. Bovie shall use commercially reasonable efforts
to supply Arthrex with all of its Product requirements, including, but not
limited to, the use of commercially reasonable efforts to accommodate "Rush"
orders from Arthrex; provided,
however, Bovie
shall not be in breach of this Agreement for any failure to supply quantities of
Products which exceed the Quarterly
Commitments provided by Arthrex under Section 2.3(a) by more than 200%.
2.4 Orders,
Packaging and Delivery
(a) Unless
otherwise agreed to in writing by the parties, all Products purchased pursuant
to this Agreement shall be effected by Arthrex's issuance of a firm written
Purchase Order, consistent with Section 2.3 above. Each Purchase Order shall
specify the type and quantity of the Product to be delivered, as well as
requested Delivery Dates. All requested Delivery Dates shall provide for at
least 30
days lead
time for the manufacture and delivery of the Products ordered (taking into
consideration the production schedule established in the Quarterly
Commitments). A failure by Bovie to deliver Products within 30
days of a
Delivery Date shall be a material breach of this Agreement and be subject to
Section 7.1.
(b) (1) Bovie
shall be responsible for, in accordance with the terms,
provisions
and conditions set forth in this Agreement: (i) the sterilization of the
Products at its facility or facilities or at any contract facility or
facilities; (ii) the packaging of the Products for shipment in accordance with
validated procedures; and (iii) the shipment of such Products. Arthrex, at its
own expense, will provide Bovie with Arthrex's labeling for the Products bearing
Arthrex's corporate name and trade dress. Bovie will print, either directly or
through a third party, labels and other printed material to be included as part
of the finished Products. Products manufactured by or on behalf of Bovie after
Bovie's receipt of any new or altered labeling for the Products, shall bear such
new labeling. Bovie shall also place other required notices and marks, such as
ETL and CE (both as defined below) notices and markings, as Arthrex may
hereafter prescribe from time to time as it deems appropriate, on all copies and
embodiments of the Products and associated documentation and advertising. Bovie
shall not remove any Arthrex approved or designated notice from any Products. As
set forth in Section 3.1, Arthrex will pay
the costs of all private labeling by Bovie.
(2) Except as
set forth in Appendix C, Bovie shall not hire, contract with or otherwise engage
anyone or more contract facilities to perform any of its obligations as set
forth in this Agreement with respect to the sterilization of the Products
without the prior written consent of Arthrex, which consent shall not be
unreasonably withheld or delayed; provided, that any contract facility that is
engaged in any way with the sterilization of the Products shall (i) perform the
sterilization of the Products in accordance with specifications that have been
provided or approved in writing by Arthrex and (ii) meet the same governmental
and regulatory requirements, and maintain the same registrations and
certifications, as applicable, that Bovie is required to meet under Section 2.5;
provided, further, that Bovie shall be liable for, and shall indemnify and hold
Arthrex harmless in connection with liabilities arising from, any violations of
this Section 2.4(b)(2).
(a) Unless
otherwise agreed to, in writing, by the parties, all Products manufactured for
Arthrex shall be delivered to Arthrex at its principal place of business in
Naples, Florida. All shipments of Products to Arthrex shall be billed F.O.B.
Bovie's manufacturing plant in Florida. All deliveries shall be delivered in a
manner as may be, intermittently, agreed to by the parties. Title to and risk of
any loss and/or damage to the Products shall pass to Arthrex upon delivery of
such Product by Bovie, or any agent of Bovie, to the shipping
agent.
(b) Bovie
shall assist Arthrex in arranging any desired shipping insurance (in amounts
that Arthrex shall determine) and shall use its best efforts to deliver all
Products by their respective requested Delivery Dates (provided that in no event
shall a Delivery Date be less than 30 days after the date the Purchase Order is
issued, unless otherwise consented to by Bovie), using mutually agreeable
carriers. All costs and expenses relating to transportation and delivery shall
be at Arthrex's expense. Arthrex shall have the right to require and inspect any
special or varied packing that it believes is reasonably necessary to meet the
customs, regulatory or other requirements within a territory.
(c) Bovie
shall certify, in writing, upon Arthrex's written request, that each delivery of
Product was produced and tested in compliance with the Product
Specifications.
(d) Arthrex
may return any defective Products to Bovie, pursuant to a product recall or
otherwise, for credit or replacement as Arthrex shall determine.
2.5 Quality
Control and Regulatory Compliance
(a) During
the Term, Bovie shall establish and maintain a quality assurance control program
to be maintained by its Quality Control Team. Bovie shall enter into Arthrex's
Contract Manufacturers/Suppliers/Vendors Agreement with respect to quality
assurance, a copy of which is attached hereto as Appendix D. Arthrex shall
maintain its Quality Control Department, which shall provide technical and other
assistance to Bovie in order for Bovie to better understand and meet the Product
Specifications and manufacturing requirements. Bovie's Quality Control Team and
Arthrex's Quality Control Department shall work together in an effort to
establish total quality assurance.
(b) During
the Term, Bovie shall manufacture the Products in a manner that is in compliance
with all federal and state governmental and regulatory requirements in the
United States of which Bovie is legally required to comply, including, but not
limited to, the FDA's Quality System Regulations ("QSR"), including Good
Manufacturing Practices ("GMP"), as well as ISO-900 I registrations (provided
and for such time that such standards remain valid) and EN 46001 certification,
and with the laws and regulations of each jurisdiction located outside of the
United States. Bovie, at its sole expense, shall have ETL Xxxxx'x medical
devices group ("ETL") test and evaluate each of the Products and maintain the
eligibility of the Products for ETL Certification and for E1L's Certification
Xxxx. Bovie shall also comply with the essential requirements of the European
health, safety and environmental protections legislations set forth in the
European Union Council Medical Device Directives (the "EU Medical Device
Directives") and declare such compliance by affixing the "CE Marking" to the
Products shipped to Arthrex.
(c) Bovie
shall maintain all documents and records necessary for regulatory compliance and
such documents and records shall be maintained for a period of no less than
seven years from creation. Upon request and within a reasonable period of time,
Bovie shall make such documents and records completely available for inspection
by Arthrex, at any reasonable time during normal business hours. All such
documents and records reviewed by Arthrex shall be subject to the
confidentiality provisions of Section 8 herein.
(d) Bovie
hereby covenants, after reasonable input from Arthrex, to implement a failure
investigation mode that is reasonably satisfactory to Arthrex and to establish a
formal complaint system as required by the United States Food, Drug &
Cosmetic Act, as amended, including all regulations promulgated pursuant thereto
(the "Act"), including, without limitation, the time requirements set forth in
the Medical Device Reporting regulations. Each party shall maintain a record of
all complaints received with respect to any Product in each jurisdiction in
which the Products are sold, and shall promptly notify the other party of such
complaints, in order to allow the responsible party to comply with any and all
regulatory requirements imposed upon it, by any country. Further, Bovie agrees
to assist Arthrex in analyzing and responding to such complaints and to make all
records readily accessible to Arthrex. Arthrex shall, upon receipt, notify
Bovie, in writing, of all warnings, disclaimers or informed consent statements
relating or affixed to any Products, or required to be acknowledged as a
condition to use of such Products.
(e) In the
event of a regulatory audit at Arthrex, which involves any Products, Arthrex
shall notify Bovie of such audit within one week thereof. Pursuant to such
notice of audit, Bovie shall supply Arthrex with documents from the Quality
Control Team, related to the Products, within three business days from a request
by Arthrex.
(f) Bovie
shall promptly notify Arthrex whenever a request for a plant inspection is
received from the FDA and shall promptly advise Arthrex of any scheduled FDA
inspection and the results thereof. A copy of Form 483 observation or other
applicable report,
which
applies to the Products, shall be supplied to Arthrex upon request. Bovie shall
promptly take steps to remedy any valid deficiencies found by the FDA inspectors
relating to the manufacture, sterilization and packaging of the Products.
2.6 Plant
Inspection
Arthrex
shall have the right to have qualified Arthrex employees, contractors or agents
present at Bovie's manufacturing facility, at mutually agreeable times during
normal business hours to (i) observe Bovie's manufacture of Products; (ii)
inspect Bovie's facility and manufacturing procedures, as such relate to
Products manufactured hereunder, and quality assurance/control procedures for
compliance with (A) QSR, including GMP, as well as 180- 9001 registrations
(provided and for such time that such standards remain valid) and EN 46001
certification, (B) ETL standards for testing and evaluation of each of the
Products and (C) compliance with the ED Medical Device Directives in connection
with the CE Marking; and (iii) inspect Bovie's inventory, work-in-process, raw
materials, QSR records and such other matters as may be pertinent to proper
quality assurance of Products to be delivered under the terms of this
Agreement.
2.7 License
Subject
to the provisions of this Agreement, during the Term, Arthrex grants to Bovie a
limited non-exclusive, non-transferable license to the intellectual property set
forth on Appendix E or provided by Arthrex from time to time in accordance with
Section 2.1, solely to manufacture, sterilize and package the Products. Such
license is personal to Bovie and shall not be sublicensed to, transferred to or
used for the benefit of, any person or entity not authorized in writing by
Arthrex except to a Back-up Supplier as set forth in Section 2.11. No other
licenses of any rights of Arthrex, except those expressly granted by this
Agreement, shall be construed to be extended to Bovie or its affiliates, foreign
divisions, licensees or customers, expressly or by implication, whether
pertaining to the subject matter of this Agreement or otherwise. To the extent
reasonable and practical, Bovie shall place all notices, including, but not
limited to, intellectual property notices such as patent notices or
confidentiality notices, and legends and other notices as Arthrex may hereafter
prescribe from time to time as it deems appropriate, on all copies and
embodiments of the Products and associated documentation and advertising. Bovie
shall not remove any Arthrex approved or designated notice from any
Products.
2.8 Acceptance
and Rejection
(a) Except as
provided herein, Arthrex shall accept all Products delivered in accordance with
the terms and conditions of this Agreement. Arthrex may reject any portion of
any shipment of Products if such shipment does not conform in any material
respect with (i) the Product Specifications or (ii) subject to Section 2.3(b),
the quantities requested in the Purchase Order. In order to reject a shipment,
Arthrex must give Bovie a reasonably detailed statement of its reasons for
rejection and, where appropriate, Product samples demonstrating the proposed
nonconformance and requesting that Bovie either remedy or provide a reasonable
plan to promptly remedy such nonconformance within a reasonable time which shall
not to exceed 45 days. If no such statement is received by Bovie, then Arthrex
shall be deemed to have accepted the shipment of Product. In the event of proper
rejection by Arthrex, Bovie shall, within five days, notify Arthrex of whether
it accepts Arthrex's notice of nonconformity or it shall be deemed to accept
such notice.
(b) If Bovie
disagrees with any proposed nonconformity by Arthrex, then both parties agree to
cooperate and make every reasonable effort to resolve the disagreement. If Bovie
confirms Arthrex's rejection, Bovie shall, at its sole option, and in a
reasonably prompt manner, either (i) replace (if it has not already done so) the
nonconforming Product with conforming Product or (ii) credit to Arthrex the
purchase price therefor.
(c) Any
replacement shipments shall be subject to the provisions and procedures
contained in this Agreement. Whether or not Bovie accepts Arthrex's basis for
rejection, upon receipt of a notice of rejection and at Arthrex's request, Bovie
shall use its reasonable commercial efforts to promptly provide replacement
Product, which shall be purchased by Arthrex pursuant to this
Agreement.
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2.9 Product
Recalls
(a) In the
event that either Bovie or Arthrex determines that a recall of any one or more
Products is necessary for any reason, Bovie and Arthrex, as applicable, shall so
notify each other in writing. Arthrex shall, immediately upon receipt of such
notice, give notice of the recall to each customer to which it has sold any
Products, along with the instructions, if any, delivered by Bovie or prepared by
Arthrex and/or Bovie relating to the recall.
(b) Arthrex
and Bovie shall assist each other in giving effect to the recall. Bovie shall
bear all costs and expenses of any recall caused by its manufacturing,
packaging, misbranding or other issues caused by acts of Bovie that potentially
affect the safety, use or efficacy of the Products including, without
limitation, obligations to third parties, costs of notifying customers and costs
associated with the shipment of recalled Products from customers to Arthrex or
Bovie, and replacement of such products. Arthrex shall, however, bear all costs
of any recall caused by its misrepresentations or other acts causing a recall to
occur.
2.10 Arthrex's
Right of First Refusal/Offer
of Additional Manufacturing
(a) In the
event that, at any time and from time to time, Bovie desires on its own behalf,
and not in connection with any contract, agreement or arrangement with any third
party, to manufacture, develop or produce any products which are compatible with
or otherwise relate to the technology contained in the Products ("Other
Products"), Bovie shall first give written notice to Arthrex of such desire,
allowing Arthrex a reasonable opportunity to offer to be the exclusive seller or
distributor of such Other Products, upon terms, conditions and provisions
reasonably similar to the terms, conditions and provisions contained herein;
provided,
however, that
subject to Section 10, Bovie shall have no obligation to make any such offer to
Arthrex in connection with any Other Products which Bovie develops, produces or
manufactures on behalf of third parties.
(b) Arthrex
must, within 30 days after receipt of the written notice, provide Bovie with a
written notice of acceptance ("Notice of Acceptance"), specifying a good faith
estimate of the quantity of Other Products that it shall sell or distribute,
based upon terms and conditions reasonably similar to the terms and provisions
contained herein. If, within 30 days of receipt of the written notice, Arthrex
has not delivered an effective Notice of Acceptance, Bovie shall have the right
to solicit any third party for the exclusive distribution of the Other Products,
without incurring any liability to Arthrex.
2.11 Alternate
Source of Supply
If Bovie
is unable to supply Arthrex with its Product requirements in accordance with
Sections 2.1, 2.2 and 2.3 herein, including, but not limited to, an order by
Arthrex for Products which exceeds a Quarterly
Commitment by more than 200%, then
Bovie shall promptly notify Arthrex of its inability to supply such Products. If
the supply issue cannot be resolved, Arthrex shall have the right to engage a
Back-Up Supplier to manufacture and supply the Products and to terminate any
Purchase Order, in whole or in part, that Bovie was unable to fill without
liability or charge. Such right shall continue until 30 days after Bovie
notifies Arthrex that it is prepared to supply all of Arthrex's Product
requirements, as provided herein. Bovie shall, in good faith, cooperate fully
with Arthrex and any Back-Up Supplier in supplying Arthrex with Products,
including assisting in the transfer of molds and any information necessary for
the supply of such Products. Any disclosure by Bovie and/or Arthrex to, or with
regard to, a Back- Up Supplier, or use of technical information by a Back-Up
Supplier, shall be subject to the Confidentiality provisions set forth in
Section 8 herein. Nothing in this Section 2.11, or this Agreement, shall
interfere with Arthrex's right to designate a Back-up supplier to manufacture
Products under the terms of this Section 2.11.
3.0 PRICE
AND PAYMENT; REBATE.
3.1 Purchase
Price'
The
prices (the "Prices") for Products purchased hereunder shall be calculated on
August
15, 2002, and
semi-annually
thereafter on each August
15 and
February
15 of each
calendar year of the Term (each, a "Pricing Date"), in accordance with the
formula set forth in Appendix F; provided,
however, that if,
on August
15,2002, the
Price of the 3mm
High Profile Ablation Wand, as calculated in accordance with
Appendix F, exceeds
$27.50 per unit, based
upon aggregate purchases by Arthrex of at least 5,000 units by
August
15, 2002, the
parties hereby agree that they shall reevaluate the appropriate pricing
mechanism for the 3mm
High Profile Ablation Wand. The
Prices shall include all charges related to Bovie's preparation, labeling,
packaging, crating and loading of the Products. On each Pricing Date, the Prices
shall be calculated, set and be effective as of such Pricing Date until the
immediately succeeding Pricing Date (or the end of the Term, if earlier), in
accordance with the formula set forth on Appendix F. In the event that Bovie
becomes entitled to a discount, rebate or other purchase price reduction (but
not including an ordinary reduction in price of the materials) after any Pricing
Date that would have the effect of lowering anyone or more of the Prices for
such period, Bovie hereby agrees that, at the sale discretion of Arthrex, either
(i) the applicable Prices shall be recalculated to reflect the decrease in costs
to Bovie or (ii) Bovie shall extend a credit to Arthrex that is equal to the
difference between Arthrex's actual payments and that price that would have been
charged had the reduction been calculated on the previous Pricing
Date.
3.2 Taxes
and Duties
Except as
provided in this Agreement, each party shall be responsible for the payment of
all taxes and other governmental charges assessed against it and applicable in
any respect to this Agreement, and the grant or exercise of the rights granted
by this Agreement, and, in the event the other party is required to collect such
charges, shall promptly pay such charges to the other party. If any transaction
undertaken pursuant to this Agreement shall be subject to a foreign, state or
local sales tax, use tax, value added tax, customs duties or other similar taxes
or duties, the transferee of the property in the transaction giving rise to such
tax or duty shall be liable for payment of such tax or duty, and shall reimburse
the transferor for any tax or duty payments the transferor shall be required to
make to any governmental authorities.
3.3 Payment
of the Purchase Price
Bovie
shall xxxx Arthrex for all purchases made under this Agreement, by invoice sent
to Arthrex at Arthrex's address referenced on the first page of this Agreement.
All invoices submitted by Bovie to Arthrex shall be payable within 30 days after
Arthrex's receipt of said invoices; provided,
that
Arthrex shall be entitled to a 1%
discount from each invoice if such payment is made within IO days' of receipt of
such invoice.
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3.4 Rebate
Bovie
shall issue a credit or refund to Arthrex for, or replace at no charge to
Arthrex, all defective or otherwise unmerchantable Products returned by Arthrex,
or returned by the customers to Arthrex and subsequently returned to Bovie by
Arthrex, within 30 days of return to Bovie, and Bovie shall bear responsibility
for all costs associated with such Products, including any regular surface
freight charge.
4.0 CAPITAL
EQUIPMENT; DESIGNS/SPECIFICATIONS.
4.1 Capital
Equipment
Bovie
shall provide for such capital equipment as Bovie deems reasonably necessary for
the manufacturing, sterilizing and packaging of the Products at the Bovie plant
or facility or any contract facility used by Bovie. All such capital equipment
provided by Bovie shall remain the sale property of Bovie, and all processes and
specifications that relate to such capital equipment shall constitute Bovie's
proprietary Confidential Information, as defined in Section 8 herein, belonging
exclusively to Bovie. Any and all copyrights, patents, trademarks, proprietary
rights and/or trade secrets, registered or otherwise, arising or occurring,
under federal, state or other law and/or regulation, from or as a result of
Bovie capital equipment or any Confidential Information belonging to Bovie,
shall remain the sale property of Bovie.
4.2 Tooling
Equipment
In the
event that any tooling equipment is needed for the manufacturing, sterilizing
and packaging solely of the Products (the "Tooling Equipment"), Arthrex shall,
at its sale discretion, either pay for such Tooling Equipment or reimburse Bovie
for the purchase of such Tooling Equipment at Bovie's 'purchase price including
any discounts, rebates or other purchase price reductions to which Bovie is
entitled; provided,
that
Arthrex shall consent in writing to the need for any Tooling Equipment prior to
the purchase or order thereof. Any such Tooling Equipment shall be and remain
the sole property of Arthrex. Bovie shall reimburse A1ihrex for any damage to
the Tooling Equipment that exceeds the normal wear and tear of such Tooling
Equipment or was caused by the abuse or misuse of such Tooling Equipment by
Bovie, its Representatives or the representatives of any contract facility
engaged by Bovie.
4.3 Designs/Specifications;
Manufacturing Processes
Arthrex
shall retain sole ownership of the designs and specifications provided by it for
Products, to the extent that such designs and specifications constitute
proprietary Confidential Information, as defined in Section 8 herein. Bovie
shall retain sale ownership of all design and specifications, manufacturing
processes, including, but not limited to, injection or insert molding, and
assembly and packaging procedures, which processes shall constitute proprietary
Confidential Information, as defined in Section 8 herein.
4.4 Retention
of Samples
Bovie
shall retain as samples such quantities of Products as Arthrex shall reasonably
request. Retained samples shall be maintained in a suitable manner for a
reasonable period of time past the manufacture date. All such samples shall be
available for inspection and testing by Arthrex at reasonable times and upon
reasonable notice.
-4-
5.0 WARRANTIES;
LIMITATION OF LIABILITY; INSURANCE.
5.1 Product
Warranties
Subject
to the provisions set forth in Section 5.3 below, Bovie warrants: (i) that all
Products delivered hereunder shall conform in every material respect to Product
Specifications at the time of shipment; (ii) that all Products shall be
manufactured, sterilized and packaged in accordance with (A) QSR, including GMP,
as required by the Act, (B) the pertinent rules and regulations of the FDA and
(C)
the EU
Medical Device Directive, and shall have been evaluated and tested by ETL; and
(iii) that no Product delivered hereunder shall at time of shipment be
adulterated or misbranded within the meaning of the Act, or within the meaning
of any applicable state or municipal law in which the definitions of
adulteration and misbranding are substantially the same as those contained in
the Act, provided such laws are constituted and effective at the time of such
delivery (collectively, the "Product Warranties"). These Product Warranties
shall be null and void and shall not apply to any Product which is in any way
altered, modified, damaged or replaced by any person other than Bovie, or which
is abused or misused whether intentionally or accidentally.
5.2 Intellectual
Property Warranties
Subject
to the provisions set forth in Section 5.4 below, Arthrex warrants that, solely
from its provision of Product Specifications, if any, the manufacture, use or
sale of any Product manufactured by Bovie will not constitute or create an
infringement of any United States or non-United States patent, copyright,
trademark or other proprietary right or trade secret, be it registered or
otherwise, arising under federal, state or other law and/or
regulation.
5.3 Limitation
of Liability of Bovie
THE
FOREGOING WARRANTIES, SET FORTH IN SECTION 5.1 ABOVE, ARE EXCLUSIVE AND ARE IN
LIEU OF ALL OTHER WARRANTIES AND REPRESENTATIONS OF ANY KIND. BOVIE HEREBY
DISCLAIMS ALL OTHER WARRANTIES AND REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR USE AND/OR PARTICULAR PURPOSES. BOVIE SHALL NOT, UNDER ANY CIRCUMSTANCES, BE
LIABLE FOR SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY NATURE
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY LOST REVENUES OR PROFITS OF
ARTHREX AND/OR ITS CUSTOMERS, AGENTS AND DISTRIBUTORS, RESUL TING FROM OR
ARISING OUT OF OR IN CONNECTION WITH ANY SALE, MANUFACTURE, DISTRIBUTION OR ANY
USE OF ANY PRODUCT, WHETHER OR NOT BOVIE HAS BEEN ADVISED OF THE POSSIBILITY OF
DAMAGES, EXCEPT TO THE EXTENT OF NEGLIGENCE AND WILLFUL MISCONDUCT OF BOVIE OR
ITS REPRESENTATIVES. THE FOREGOING LIMITATION OF LIABILITY APPLIES
BROADL Y,
AND TO ANY AND ALL PRODUCTS MANUFACTURED AND SUPPLIED HEREUNDER, AND SHALL NOT
BE CONSTRUED TO APPLY ONLY TO DAMAGES OCCURRING AS A RESULT OF BREACH OF ANY
PRODUCT WARRANTIES, BUT SHALL ALSO APPLY TO ANY DAMAGES TO ARTHREX OCCURRING AS
A CONSEQUENCE OF THIS AGREEMENT OR ANY BREACH THEREOF, EXCEPT TO THE EXTENT OF
NEGLIGENCE AND WILLFUL MISCONDUCT OF BOVIE OR ITS REPRESENTATIVES. ALL
LIMITATIONS OF LIABILITY, PURSUANT TO THE TERMS HEREIN, SHALL SURVIVE ANY
TERMINATION OR EXPIRATION OF THIS AGREEMENT.
| 5.4 |
Limitation
of Liability of Arthrex |
ARTHREX
HEREBY DISCLAIMS ALL EXPRESS OR IMPLIED WARRANTIES AND REPRESENTATIONS,
INCLUDING, WITHOUT LIMITATION, IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS
FOR USE AND/OR PARTICULAR PURPOSES. ARTHREX SHALL NOT, UNDER ANY CIRCUMSTANCES,
BE LIABLE FOR SPECIAL, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES OF ANY NATURE
WHATSOEVER, INCLUDING, WITHOUT LIMITATION, ANY LOST REVENUES OR PROFITS OF BOVIE
AND/OR ITS CUSTOMERS, AGENTS AND DISTRIBUTORS, RESULTING FROM OR ARISING OUT OF
OR IN CONNECTION WITH ANY SALE, DISTRIBUTION OR ANY USE OF ANY PRODUCT, WHETHER
OR NOT ARTHREX HAS BEEN ADVISED OF THE POSSIBILITY OF DAMAGES, EXCEPT TO THE
EXTENT OF NEGLIGENCE AND WILLFUL MISCONDUCT OF ARTHREX OR ITS REPRESENTATIVES.
THE FOREGOING LIMITATION OF LIABILITY APPLIES BROADLY, AND TO ANY AND ALL
PRODUCTS DISTRIBUTED OR SOLD HEREUNDER, AND SHALL NOT BE CONSTRUED TO APPLY ONLY
TO DAMAGES OCCURRING AS A RESULT OF BREACH OF ANY PRODUCT WARRANTIES, BUT SHALL
ALSO APPLY TO ANY DAMAGES TO BOVIE OCCURRING AS A CONSEQUENCE OF THIS AGREEMENT
OR ANY BREACH THEREOF, EXCEPT TO THE EXTENT OF NEGLIGENCE AND WILLFUL MISCONDUCT
OF ARTHREX OR ITS REPRESENTATIVES. ALL LIMITATIONS OF LIABILITY, PURSUANT TO THE
TERMS HEREIN, SHALL SURVIVE ANY TERMINATION OR EXPIRATION OF THIS
AGREEMENT.
| 5.5 |
Insurance |
Bovie
shall acquire and maintain products liability insurance in a minimum amount of
$5 million in the aggregate and $2 million per occurrence , and Bovie shall name
Arthrex as an additional insured on all such policies and will provide Arthrex
with proof of insurance prior to the Start Date (as defined below) and
thereafter upon Arthrex's reasonable request. Such insurance shall be in
addition to, and not in lieu of, any insurance policy or policies maintained by
Arthrex. Bovie shall not cancel or terminate such products liability insurance
without 30 days prior notice to Bovie. Bovie shall notify Arthrex not less than
30 days' prior to any proposed cancellation, termination, non-renewal or
modification of such products liability insurance. Bovie acknowledges that a
failure to comply with this Section 5.5 shall be a material breach under Section
7 of this Agreement
6.0 TERM.
This
Agreement shall commence upon execution and delivery of this Agreement. The term
of this Agreement shall be five years, commencing on the date of the first
commercial ship111ent of Products manufactured at, and from, Bovie's facility
(the "Start Date"), and closing upon expiration of the fifth full year following
the Start Date (the "Term"). Following closing of
the
initial Term, this Agreement shall be renewed for consecutive three-year
periods, subject to the written consent of both parties. If this Agreement is
extended in accordance with the preceding sentence, the "Term" shall be extended
until the end of the applicable extension period. Written notification to
terminate must be given not less than 180 days prior to the intended termination
date; provided,
that if
Arthrex elects to have the Agreement terminate in accordance with this Section
6.0, Arthrex shall purchase all of Bovie's remaining inventory of the Products
up to and to the extent that Bovie's inventory does not exceed the Quarterly
Commitment for the quarter during which this Agreement is so terminated by
Arthrex.
7.0 TERMINATION.
7.1 Termination
for Material Breach
(a) Either
party may terminate this Agreement, in writing, in the event of a material
breach by the other of this Agreement; provided,
however, that the
party asserting such breach must first serve written notice of the alleged
breach on the offending party, and must allow the offending party 45 days, from
the date of delivery of such notice, within which to cure the alleged breach.
For purposes of this Agreement, the term "material breach" shall include, but
not be limited to:
(i) Bovie's
breach of Section 2.1 (a) or 2.1(e);
(ii) the
termination, for any reason, of the Original Equipment Manufacturer Agreement
entered into between the parties hereto, dated as of the date
hereof;
| (iii) |
Bovie's
breach of Section 2.4(a); or |
(iv) Bovie's
transfer or sale of all or part of its individual assets, or all or part of its
individual business pertaining to the Products manufactured and supplied
pursuant to this Agreement; provided,
however, that it
shall not be a material breach hereunder if any party that it is not a
competitor of Arthrex, other than any Affiliate of Davie, becomes a party to
either: (i) a merger by, with or of Bovie, or any part, Affiliate or subsidiary
of Bovie that is involved in the manufacture, development, sterilization,
packaging or supply of the Products; or (ii) an acquisition of Bovie or any
part, Affiliate or subsidiary of Bovie that is involved in the manufacture,
development, sterilization, packaging or supply of the Products. Notwithstanding
the preceding, Arthrex may terminate this Agreement immediately, without notice
or cure period, upon a material breach described in either clause (iii) or
clause (iv) above.
(b) Arthrex
shall have the right to both immediately terminate this Agreement and obtain
injunctive relief in the event of the unauthorized use and/or disclosure of the
Confidential Information by Bovie. Arthrex may terminate this Agreement
immediately upon any attempt, unless, if curable, cured within 45 days by Bovie,
to assign, delegate, sublicense or otherwise transfer the license set forth in
Section 2.7 or any of its rights or obligations under this Agreement, except as
expressly provided for in this Agreement.
7.2 Bankruptcy;
Insolvency
Either
Party may terminate this Agreement, effective immediately upon the gi ving of
written notice, if the other Party shall file a petition for bankruptcy, or
shall be adjudicated a bankrupt or insolvent, or shall take advantage of the
insolvency laws of any state of the United States or of any country, or shall
make an assignment for the benefit of creditors, or shall have a receiver
appointed, whether by private instrument or by court officer, for its property
which is not dismissed within 60 days, or become subject to an involuntary
petition for bankruptcy which in not dismissed within 60 days.
| 7.3 |
Effect
of Termination |
In the
event of termination of this Agreement pursuant to this Section 7, both parties
shall cooperate with each other and make all reasonable, good faith efforts to
accommodate each other, including but not limited to, with the transfer and/or
return of molds, equipment, Confidential Information and any other information,
documentation and/or data. Termination of this Agreement, for whatever reason,
shall not affect any rights or obligations that may have accrued to either party
prior to the effective date of such termination.
| 7.4 |
Survival |
The
obligations of consent to change the Products and the Product Specifications set
forth in Section 2.1, the obligations of Confidentiality, set forth in Section
8, the Warranties and Limitation of Liability provided for in Section 5, the
Indemnification provisions set forth in Section 9 and the provision for
Assignment set forth in Section 11 herein, shall survive the expiration or
termination of this Agreement.
8.0 CONFIDENTIALITY.
8.1 The
parties hereby agree to keep strictly confidential and to not use, or permit the
use of, for any purpose whatsoever during the Term, and for a period of five
years following expiration or termination of this Agreement, all information
received or observed from the other party pursuant to this Agreement or
otherwise (including, without limitation, information of such party or such
party's customers or the business associates disclosed or observed, information
that is known or reasonably should be known to be trade secrets and/or
proprietary in nature, and licenses, patents, patent application, technology or
processes and business plans of the other party) (the "Confidential
Information"), except as disclosure or use of such Confidential Information is
expressly permitted by this Agreement. Confidential Information does not include
information which: (i) is or becomes available to the general public or to other
manufacturers within the applicable industry, through no act or fault of the
recipient; (ii) is rightfully disclosed to recipient by a third party under no
obligation of confidentiality with respect to such information; or (iii) is
rightfully in the possession of the recipient at the time of disclosure without
obligation of confidentiality or non-use with respect thereto.
8.2 The
recipient of Confidential Information shall protect it from disclosure with the
same degree of care by which it protects its own Confidential Information. Each
party shall use its best efforts to ensure that its Representatives do not
disclose or make any unauthorized use of Confidential Information, and each
party agrees to promptly notify the other upon discovery of any unauthorized use
or disclosure of the other party's Confidential Information. Each party shall be
liable for the unauthorized use or disclosure of the other party's Confidential
Information by such party's Representatives,
8.3 Bovie
shall not use the proprietary Confidential Information belonging to Arthrex,
including, without limitation, Arthrex's designs, specifications, drawings,
processes, materials, molds, tooling, jigs and fixtures, for any purpose other
than to manufacture Products for Arthrex, without Arthrex's prior written
consent.
8.4 In the
event that Bovie or any of its Representatives is requested or required (by oral
questions, deposition, interrogatories, requests for information or documents,
subpoena, civil investigative demand or other process) to disclose all or any
part of any Confidential Information, Bovie will provide Arthrex with prompt
notice of such request or requirement so that Arthrex may seek an appropriate
protective order or waive compliance with the provisions of this Agreement, as
well as notice of the terms and circumstances surrounding such request or
requirement. In such case, the parties will consult with each other on the
advisability of pursuing any such order or other legal action or available steps
to resist or narrow such request or requirement If, failing the entry of a
protective order or the receipt of a waiver hereunder, Bovie is, in the opinion
of counsel acceptable to Arthrex, legally compelled to disclose Confidential
Information, Bovie may disclose that portion of the Confidential Information
which counsel advises Bovie that it is legally compelled to disclose. In any
event, Bovie will use its best efforts to obtain and will not oppose action by
Arthrex to obtain an appropriate protective order or other reliable assurance
that confidential treatment will be accorded the disclosure of such information.
Bovie will cause its Representatives and agents to comply with this
paragraph.
9.0 INDEMNIFICATION.
9.1 Arthrex
agrees to and shall indemnify and defend Bovie, and hold Bovie harmless, from
and against any and all claims, alleged claims, losses, xxxxx, damages,
liabilities, penalties, lawsuits, threats of lawsuits, recalls or other
governmental action, costs and expenses, including, without limitation,
reasonable attorneys' fees, suffered or incurred, made against or sustained by
Bovie or any of its Affiliates, arising from or as a result of: (i) any actual
or alleged defects in the design of any Product and/or the Arthrex-provided
Product Specifications; (ii) any Arthrex breach of this Agreement; (iii) any
acts, negligent or otherwise, or willful malfeasance on the part of Arthrex or
its Representatives or customers, in connection with Arthrex's design, sale,
marketing or distribution of Product and/or any other activities or actions in
connection with the Product; and/or (iv) any claims or allegations that the
manufacture, use or sale of any Product manufactured by Bovie resulting solely
from such Arthrex-provided Product Specifications hereunder constitutes or
creates an infringement of any United States or non- United States patent,
copyright, trademark or other proprietary right or trade secret, be it
registered or otherwise, arising under federal, state or other law and/or
regulation.
9.2 Bovie
agrees to and shall indemnify and defend Arthrex, and hold Arthrex harmless,
from and against any and all claims, alleged claims, losses, xxxxx, damages,
liabilities, penalties, lawsuits, threats of lawsuits, recalls or other
governmental action, costs and expenses, including, without limitation,
reasonable attorneys' fees, suffered or incurred, made against or sustained by
Arthrex or any of its Affiliates, arising from or as a result of: (i) injury to
person or property to the extent that such claims arise out of or result from
(A) any product liability claim with respect to the manufacturing,
sterilization, packaging, branding and delivery of the Products, (B) any actual
or alleged defects in the designs of any product if such defect is the result of
Bovie-provided Product Specifications or (C) the failure of Bovie to meet all of
the Arthrex-provided Product Specifications; (ii) any Bovie breach of this
Agreement; (iii) any acts, negligent or otherwise, or willful malfeasance on the
part of Bovie or its Representatives, contract facilities or customers, in
connection with Bovie's manufacturing, sterilizing, packaging, branding and
delivery of the Products and/or any other activities or actions in connection
with the Products; and/or (iv) any claims or allegations that the manufacture of
any of the Products resulting solely from Bovie's manufacture of such Products
or from Bovie-provided Product Specifications hereunder constitutes or creates
an infringement of any United States or non-United States patent, copyright,
trademark or other proprietary right or trade secret, be it registered or
otherwise, arising under federal, state or other law and/or
regulation.
9.3 Nothing
in this Section, or in the terms of this Agreement, shall limit Bovie's
liability to an unaffiliated third party for a claim, or alleged claim, against
Bovie for death or bodily injury to such third party caused by gross negligence
or willful misconduct in the manufacture of a Product hereunder, where such
gross negligence or willful misconduct resulted in a material nonconformance, at
the time of shipment, to Product Specifications.
9.4 Each
party shall give the other prompt notice of any potential liability, and upon
receiving notice of any such liability, each party shall, when possible,
promptly notify the other of commencement of any action, a general summary of
the action and, when applicable, notice by Bovie to Arthrex of demand for
indemnification. In the later event, Arthrex shall have the right to participate
in and to assume the defense of such action with counsel of its choosing;
provided,
however, that
both parties should cooperate in such defense, if and when such cooperation
would benefit the overall defense. No settlement of such action may be made
without the consent of Arthrex, which consent shall not be unreasonably withheld
or delayed. The terms of this Section shall survive the expiration or
termination of this Agreement.
10.0 NON-COMPETITION.
During
the Term, Bovie agrees not to manufacture, develop or produce directly or
indirectly, or through any person or entity, whether on its own behalf or on
behalf of any third party other than Arthrex or Arthrex's Affiliates, any
product that relates to orthopedic
joint and extremities surgery or is
otherwise directly and materially competitive with any material portion of the
Products ("Competitive Products"); provided,
however, that
Bovie may continue to manufacture, develop or produce any Competitive Product in
its own behalf that was being manufactured, developed or produced by Bovie prior
to the date hereof and to perform under any contract, agreement or arrangement
that would otherwise violate this Section 10 which was in effect prior to the
date hereof; provided,
further, that
Bovie shall not expand, increase or enlarge the scope, or quantities involved
with, (i) any such existing agreements, contracts or arrangements with third
parties or (ii) the manufacture, development or production of Competitive
Products on Bovie's own behalf, directly or indirectly. Notwithstanding the
foregoing, Bovie may not sell any Products if such Products contain any
intellectual property or Confidential Information of Arthrex.
11.0 BINDING
EFFECT/ASSIGNMENT.
11.1
This
Agreement and the performance of any obligations hereunder shall be binding
upon, shall inure to the benefit of and be enforceable by, the parties hereto
and any and all permitted assignees, successors and legal representatives of the
parties hereto.
11.2
This
Agreement, and all rights, remedies, obligations, liabilities or interests in or
arising hereunder, as well as the performance of any obligations hereunder, may
not be assigned, delegated, encumbered or in any other manner transferred,
directly or indirectly, by a party hereto, without prior written consent of the
other party. Any attempted assignment, delegation, encumbrance or other transfer
in violation of this Agreement shall be void and of no effect, and shall be a
material breach hereof.
11.3 Bovie
agrees that it shall not transfer all or part of its individual assets, or all
or part of its individual business pertaining to the Products manufactured and
supplied pursuant to this Agreement, unless and without establishing and
demonstrating, in writing, to Arthrex that the transferor of such assets and/or
business expressly agrees to assume all rights and obligations set forth in this
Agreement. The terms of this Section shall survive the expiration or termination
of this Agreement. .
12.0 MISCELLANEOUS.
12.1 Further
Assurances
Each
party hereto agrees to execute, acknowledge and deliver such fmther instruments,
and to do all such other acts, as may be necessary or appropriate in order to
carry out the purposes and intent of this Agreement.
| 12.2 |
Force
Majeure |
Except
where set forth expressly herein, neither party shall be liable for any delay or
for any consequence of any delay in the production or delivery or purchase, as
the case may be, of any of the Products if such delay shall be due to any cause
beyond its reasonable control, including, but not limited to, acts of God or the
public enemy, valid law, acts or requests of any national or provincial
government, or of any national or provincial officer or agent purporting to act
under duly constituted authority, wars, floods, fires, storms, strikes,
lockouts, delivery of nonconforming or defective material, supplies or
equipment, interruptions of transportation, freight embargoes or failures,
exhaustion or unavailability on the open market or delays in delivery of
material, supplies, equipment. or services necessary for the performance of any
provision hereof, or happening of any unforeseen acts, misfortune, or casualty
by which performance hereunder is delayed or prevented; provided,
however, that
the party so affected will use all commercially reasonable efforts to remedy the
situation, except that nothing contained herein shall require such party to make
settlement of any labor dispute on terms unacceptable to it and no such party
shall be liable to the other for any losses, damages, or costs by reason of its
inability to remedy the situation. If any such delay occurs, then (unless the
cause thereof shall frustrate or render impossible or illegal the performance of
this contract or shall otherwise discharge the same), the parties' period for
performing their respective obligations shall be extended by such period (not
limited to the length of the delay) as the other party may reasonably require to
complete the performance of its obligation. In addition to the foregoing, the
parties agree that Bovie shall have no obligation to supply Product to Arthrex
during any period in which Arthrex is in breach of any of its obligations under
this Agreement.
| 12.3 |
Relationship |
This
Agreement shall not be construed to create between the parties hereto or their
respective successors or permitted assignees, the relationship of principal and
agent, joint- venturers, co-partners or any other similar relationship, the
existence of which is hereby expressly denied by each party. Each of the parties
shall be, in all matters connected to this Agreement, independent contractors.
Neither party shall be liable to any third party in any way for engagement,
obligation, contract, representation or transaction or for any negligent act or
omission to act, of the other, except as expressly provided herein.
| 12.4 |
Notice |
All
notices, requests,. consents, demands or communications contemplated or required
by this Agreement shall be in writing and, in order to be valid, shall be
delivered by personal delivery or sent by certified or registered mail or
equivalent, return receipt requested, by facsimile or telex, promptly confirmed
by a writing sent by registered or certified mail, or by recognized overnight
courier, addressed to the parties at the addresses set forth on the first page
of this Agreement, or such other addresses as may be designated, in writing, by
the respective parties. Any notice shall be deemed given when received by the
other party.
| 12.5 |
Legal
Construction/Severability |
If any
part of this Agreement shall be held invalid or unenforceable, the remainder of
the Agreement shall nevertheless remain in full force and effect.
| 12.6 |
Section
Headings/Construction |
The
captions and headings appearing in this Agreement are for reference purposes
only and shall not be considered part of this Agreement. Such captions and
headings shall not modify, amend or affect the provision hereof. This Agreement
has been jointly prepared and shall not be strictly construed against either
party hereto.
| 12.7 |
Entire
Agreement; Modifications; Consents;
Waivers |
This
Agreement, together with the Appendices attached hereto, contains the entire
Agreement of and between Bovie and Arthrex, with respect to the subject matter
hereof. This Agreement may not be modified or amended except by an instrument or
instruments in writing, signed by the party against whom enforcement of any such
modification or amendment is sought. Each party hereto may, by an instrument in
writing, waive compliance by the other party with any term or provision of this
Agreement on the part of such other party to be performed or complied with. The
waiver by either party hereto of a breach of any term or provision of this
Agreement shall not be construed as a waiver of any subsequent
breach.
| 12.8 |
Governing
Law |
The
provisions of this Agreement shall be governed, in all respects, by the laws of
the State of Florida and adjudicated, respectively, within the exclusive
jurisdiction of the courts in the State of Florida. The United Nations
Convention on the International Sale of Goods shall not apply to transactions
made pursuant to this Agreement.
| 12.9 |
Counterparts;
Telecopies |
This
Agreement may be executed by telecopy in multiple counterparts and all of such
counterparts taken together shall be deemed to constitute one and the same
instrument. Transmission by telecopier of an executed counterpart this Agreement
shall be deemed to constitute due and sufficient delivery of such counterpart.
Each fully executed counterpart of this Agreement shall be deemed to be a
duplicate original.
| 12.10 |
Litigation |
Each
Party hereby unconditionally and irrevocably consents to the jurisdiction and
venue in the Courts of the State of Florida and in the U.S. District Court for
the Middle District of Florida, and irrevocably waives any objection (including
any objection with respect to venue) that any Party may now or hereafter have to
the jurisdiction of said courts, and irrevocably consents to the service of
process of said courts in any matter relating to this Agreement by the mailing
of process by registered or certified mail, postage prepaid, at the addresses
specified in this Agreement. If necessary, Bovie shall appoint a registered
agent in the State of Florida for acceptance of service of process and/or other
notices provided for under this Agreement and shall notify Arthrex of the
identity of such registered agent within 30 days after the Start Date. Any award
made by a court in
conjunction
with litigation between the Parties regarding this Agreement shall include an
award of all reasonable attorneys’ fees and cost incurred by the Party in whose
favor the final decision is rendered.
IN
WITNESS HEREOF, the parties hereto have executed this Agreement as of the date
first written above.
BOVIE
MEDICAL CORPORATION
By:__/S/
Xxxxxx Makrides______________
Name:
Title: President
ARTHREX,
INC.
By:__/S/Xxxxx
Price____________________
Name:
Title: Vice
President
Appendix
A
The
Products that are subject to the Manufacturing and Supply Agreement (the
"Agreement") are as follows:
The
Product Specifications for each of the aforementioned Products are as
follows:
Arthrex,
Inc. ("Arthrex"), shall provide Product Specifications
to Bovie
Medical Corporation ("Bovie")
by
September 15, 2002
The
Manufacturing Process for each of the aforementioned Products are as
follows:
Bovie
shall provide the Manufacturing Processes
to
Arthrex within 30 days of the date
that it
receives the Product Specifications from Arthrex
-5-
Appendix
B
Form of
Purchase Order
-6-
Appendix
C
Bovie
Medical Corporation ("Bovie") currently has agreements in place with the
following entities the names and addresses of which are set forth below. Each of
such entities may perform some of Bovie’s obligation under the Agreement.
**
**
** **
-7-
Appendix
D
Arthrex,
Inc.' s ("Arthrex") Form Contract Manufacturers/Suppliers/Vendors
Agreement
-8-
Appendix
E
Arthrex
shall provide the Intellectual Property set forth below, which shall be subject
to the Agreement, including, but not limited to, Sections 2.7 and Article
8:
To Be
Provided by August 15,2002
-9-
Appendix
F
The
purchase price for the Products shall be determined in accordance with the
formula set forth below:
[** **(M)
+ L ]** **
where,
"M" shall
mean the cost to Bovie for the materials on the date of calculation, which shall
include all discounts, rebates or other purchase price reductions to which Bovie
is entitled; and
"L" shall
mean the cost of labor which shall be ** ** per man hour.
